morale

Definitions

from The American Heritage® Dictionary of the English Language, 4th Edition

n. The state of the spirits of a person or group as exhibited by confidence, cheerfulness, discipline, and willingness to perform assigned tasks.

from Wiktionary, Creative Commons Attribution/Share-Alike License

n. The capacity of people to maintain belief in an institution or a goal, or even in oneself and others.

from the GNU version of the Collaborative International Dictionary of English

n. The moral condition, or the condition in other respects, so far as it is affected by, or dependent upon, moral considerations, such as zeal, spirit, hope, and confidence; mental state, as of a body of men, an army, and the like.

from The Century Dictionary and Cyclopedia

n. Moral or mental condition as regards courage, zeal, hope, confidence, and the like: used especially of a body of men engaged in a hazardous enterprise, as soldiers or sailors in time of war.

Also, those who decide not to re-hire may find that among the few jobs that do appear, their current employees may be part of the group going after them because their morale is so low from having to do more work on less pay.